Regulation Y

Bank Holding Companies and Changes in Bank Control
12 CFR 225

Summary

Regulates the acquisition of control of banks and bank holding companies by companies and individuals

Defines and regulates the nonbanking activities in which bank holding companies (including financial holding companies) and foreign banking organizations with United States operations may engage

Establishes the minimum ratios of capital to assets that bank holding companies must maintain

Proposed Amendments

To revise the existing risk-based capital framework to enhance its risk sensitivity comments due 1.18.06

Press release
Notice
Adopted jointly by the FRB, OCC, FDIC and OTS

Two interagency documents related to the proposed implementation of the new Basel Capital Accord in the United States comments due 11.03.03

Press release
Advance proposed notice of rulemaking - Implementing Basel Capital Accord
Notice - Draft supervisory guidance and expectations

Interpretation of the anti-tying restrictions in section 106 of the Bank Holding Company Act Amendments of 1970, related supervisory guidance, and an exception under section 106 for financial subsidiaries of state nonmember banks comments due 9.30.03

Press release
Notice - Interpretation of anti-tying amendments
Notice - exception to anti-tying restrictions

To the risk-based capital guidelines, to clarify the treatment of tax-deferred assets comments due 12.27.01

Notice

To permit financial holding companies to act as real estate brokers and managers

Press release
Notice
Adopted jointly with the Department of Treasury

Regarding financial data processing activities
comments due 2.16.01

To establish a safe harbor permitting a bank to offer a credit card that can be used to make purchases from a retailer affiliated with the bank comments due 3.13.00

Notice

Recent Amendments

Amendment expanding the definition of small bank holding company under the Board's Small Bank Holding Company Policy Statement and the risk-based and leverage capital guidelines for bank holding companies
eff 3.30.06

Amendment adding interpretive guidance on response programs to deal with security breaches involving customer information eff 3.29.05

Press release
Notice
adopted jointly by the FRB, OCC, FDIC and OTS

Amendment of the risk-based capital guidelines to allow for the continued limited inclusion of trust preferred securities in the tier 1 capital of bank holding companies eff 4.11.05

Amendment to require financial institutions to adopt measures for properly disposing of consumer information derived from credit reports eff 7.01.05

Press release
Notice
Adopted jointly by the FRB, OCC, FDIC and OTS

Amendment of the risk-based capital guidelines to modify the treatment of assets in asset-backed commercial paper programs eff 9.30.04

Press release
Notice
Adopted jointly by the FRB, OCC, FDIC and OTS

Amendment expanding the ability of all bank holding companies, including financial holding companies, to process, store, and transmit nonfinancial data in connection with their financial data processing, storage, and transmission activities eff 1.08.04

Amendment to allow bank holding companies engaged in permissible derivatives activities to transfer title to commodities underlying derivatives contracts instantaneously, on a pass-through basis eff 8.04.03

Rules and Interpretations

12 CFR Part 225

Subpart A General provisions

225.1 Authority, purpose, and scope
225.2 Definitions
225.3 Administration
225.4 Corporate practices
225.5 Registration, reports, and inspections
225.6 Penalties for violations
225.7 Exceptions to tying restrictions

Subpart B Acquisition of bank securities or assets

225.11 Transactions requiring Board approval
225.12 Transactions not requiring Board approval
225.13 Factors considered in acting on bank
acquisition proposals
225.14 Expedited action for certain bank acquisitions by
well-run bank holding companies
225.15 Procedures for other bank acquisition proposals
225.16 Public notice, comments, hearings, and other
provisions governing applications and notices
225.17 Notice procedure for one-bank holding company
formations

Subpart C Nonbanking activities and acquisitions by
Bank Holding Companies

225.21 Prohibited nonbanking activities and acquisitions;
exempt bank holding companies
225.22 Exempt nonbanking activities and acquisitions
225.23 Expedited action for certain nonbanking proposals
by well-run bank holding companies
225.24 Procedures for other nonbanking proposals
225.25 Hearings, alteration of activities, and other
matters
225.26 Factors considered in acting on nonbanking
proposals
225.27 Procedures for determining scope of nonbanking
activities
225.28 List of permissible nonbanking activities

Subpart D Control and divestiture proceedings

225.31 - Control and divestiture proceedings

Subpart E Change in bank control

225.41 Transactions requiring prior notice
225.42 Transactions not requiring prior notice
225.43 Procedures for filing, processing, publishing, and
acting on notices
225.44 Reporting of stock loans

Subpart F Limitations on nonbank banks

225.52 Limitation on overdrafts

Subpart G Appraisal standards for federally related
transactions

225.61 Authority, purpose, and scope
225.62 Definitions
225.63 Appraisals required; transactions requiring a state
certified or licensed appraiser
225.64 Minimum appraisal standards
225.65 Appraiser independence
225.66 Professional association membership; competency
225.67 Enforcement

Subpart H Notice of addition or change of directors and
senior officers

225.71 Definitions
225.72 Director and officer appointments; prior notice
requirement
225.73 Procedures for filing, processing, and acting on
notices; standards for disapproval; waiver of
notice

Subpart I Financial holding companies

225.81 What is a financial holding company?
225.82 How does a bank holding company elect to
become a financial holding company?
225.83 Consequences of failing to continue to meet
applicable capital and management requirements
225.84 Consequences of failing to maintain a
satisfactory or better rating under the CRA at
all insured depository institution subsidiaries
225.85 Is notice to or approval from the board required
prior to engaging in a financial activity?
225.86 What activities are permissible for any financial
holding company?
225.87 Is notice to the board required after engaging in
a financial activity?
225.88 How to request the board to determine that an
activity is financial in nature or incidental to a
financial activity?
225.89 How to request approval to engage in an activity
that is complementary to a financial activity?
225.90 Requirements for a foreign bank to be treated as
a financial holding company
225.91 How may a foreign bank elect to be treated as
a financial holding company?
225.92 How does an election by a foreign bank become
effective?
225.93 Consequences of a foreign bank failing to
continue to meet applicable capital and
management requirements
225.94 Consequences of an insured branchor depository
institution failing to maintain a satisfactory or
better rating under the CRA

Interpretations

225.101 Bank holding company's subsidiary banks owning
shares of nonbanking companies
225.102 Bank holding company indirectly owning
nonbanking company through subsidiaries
225.103 Bank holding company acquiring stock by
dividends, stock splits or exercise of rights
225.104 "Services'' under section 4(c)(1) of Bank Holding
Company Act
225.107 Acquisition of stock in small business investment
company
225.109 "Services'' under section 4(c)(1) of bank holding
company act
225.111 Limit on investment by bank holding company
system in stock of small business investment
companies
225.112 Indirect control of small business concern
through convertible debentures held by small
business investment company
225.113 Services under section 4(a) of bank holding
company act
225.115 Applicability of bank service corporation act in
certain bank holding company situations
225.118 Computer services for customers of subsidiary
banks
225.121 Acquisition of edge corporation affiliate by state
member banks of registered bank holding
company
225.122 Bank holding company ownership of mortgage
companies
225.123 Activities closely related to banking
225.124 Foreign bank holding companies
225.125 Investment adviser activities
225.126 Activities not closely related to banking
225.127 Investment in corporations or projects designed
primarily to promote community welfare
225.129 Activities closely related to banking
225.130 Issuance and sale of short-term debt obligations
by bank holding companies
225.131 Activities closely related to banking
225.132 Acquisition of assets
225.133 Computation of amount invested in foreign
corporations under general consent procedures
225.134 Escrow arrangements involving bank stock
resulting in a violation of the bank holding
company act
225.136 Utilization of foreign subsidiaries to sell long-term
debt obligations in foreign markets and to
transfer the proceeds to their United States
parent(s) for domestic purposes
225.137 Acquisitions of shares pursuant to section
4(c)(6) of the bank holding company act
225.138 Statement of policy concerning divestitures by
bank holding companies
225.139 Presumption of continued control under section
(2)(g)(3) of the bank holding company act
225.140 Disposition of property acquired in satisfaction
of debts previously contracted
225.141 Operations subsidiaries of a bank holding
company
225.142 Statement of policy concerning bank holding
companies engaging in futures, forward and
options contracts on U.S. Government and
agency securities and money market
instruments
225.143 Policy statement on nonvoting equity
investments by bank holding companies
225.145 Limitations established by the competitive
equality banking act of 1987 on the activities
and growth of nonbank banks

Conditions to orders

225.200 Conditions to board's section 20 orders

Appendices

App A Capital adequacy guidelines for bank holding
Companies: Risk-Based measure
Attach I Sample calculation of risk-based capital ratio
for bank holding companies
Attach II Summary of definition of qualifying capital for
bank holding companies
Attach III Summary of risk weights and risk categories
for bank holding companies
App B Capital adequacy guidelines for bankholding
companies and state member banks: Leverage
measure
App C Small bank holding company policy statement
App D Capital adequacy guidelines for bank holding
companies: Tier I leverage measure
App E Capital adequacy guidelines for bank holding
companies: Market risk measure
App F Interagency guidelines establishing information
security standards

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